We use cookies to provide some features and experiences in QOSHE

More information  .  Close
Aa Aa Aa
- A +

The Best Bank Accounts for You

2 0 7
24.10.2020

Getty Images

Ryan Ermey: Whether you're looking for higher interest rates, lower fees or just don't feel like going into a branch these days, don't even consider shopping for a new bank account before listening to this show. Kiplinger's contributing editor Lisa Gerstner rejoins the podcast to break down the best of big banks, online banks, credit unions and more in our main segment. On today's show, Sandy and I chat about news surrounding RMDs and answer a question about 403(b) plans from our listener mailbag. That's all ahead on this episode of Your Money's Worth. Stick around.

Ryan Ermey: Welcome to Your Money's Worth. I'm Kiplinger's associate editor Ryan Ermey and joined -- from on the road -- by senior editor Sandy Block. Sandy, how are you?

Sandy Block: That's right. I'm in West Virginia. And if you hear dogs barking, I apologize in advance.

Ryan Ermey: Well, we're on the road. We're doing this by our bootstraps.

Sandy Block: That's right.

Ryan Ermey: So people can deal with the golden retrievers barking at the mailman or what have you.

Sandy Block: Whatever, yeah.

Ryan Ermey: A couple of pieces of news to kick off the show here. And one is a piece of Kiplinger news, which I know all of our readers are excited about. And that is that we have a shiny new website.

Sandy Block: Yes, we do.

Ryan Ermey: If you've been visiting the website, either to read all of our wonderful content or to check out our podcast, you may have noticed that Kiplinger.com, the website has been replaced by an all new enhanced mobile-first design. The whole idea behind the redesigned and responsive website is that it automatically adapts to any device. It's the perfect platform to bring you even more of our award-winning content. So, yeah, go and check it out. Clean light pages should mean that the site loads more quickly, it should be faster to navigate and we should be rolling out more updates in the months ahead.

Ryan Ermey: I don't know about you Sandy, but I'm personally intrigued by the top 10 stories on the homepage. I think is going to engender some competition-

Sandy Block: That's right.

Ryan Ermey: ... among our writers and editors to make sure that we're putting out stuff that cracks the top 10.

Sandy Block: Tax stories will rule, Ryan, I'm convinced.

Ryan Ermey: I know, I know. And not all of my investing stories are the sexiest things to write about these days. It's like, you want to learn about moving averages-

Sandy Block: There you go.

Ryan Ermey: ... maybe not. But at any rate folks, go check out the website and certainly go and make sure if you haven't already subscribed to the podcast at Kiplinger.com/podcast, that can be something that you do at the same time. So onto personal finance news, Sandy, and some big news about RMDs.

Sandy Block: Right. And this should be cracking the top 10 based on the response we've gotten to this. As we talked about on an earlier show, Congress passed a legislation in March that waived required minimum distributions for 2020, people who are 72 or older have to take a minimum amount out of their IRAs. A lot of people don't like to do that when the market is down if they don't need the money. So that was good news. But the bad news was that it originally was effective after February 1st and people who took distributions in January, and I think I heard from every single one of them, were very upset about this because they took a distribution they didn't need and they wanted to put it back.

Sandy Block: Well, just a few days ago, the IRS came out with an additional guidance that said anyone who has taken an RMD in 2020 has until August 1st to put it back in their account. So if you took an RMD in January and you took a distribution in January, you can roll it back into your IRA or your 401(k) if your provider allows it. So that will mean that you can put that money back. You won't have to pay taxes on it. It can continue to grow in the market until you actually need the money. So I think a lot of people will welcome this. The other thing the IRS said is you have until August 1st to put the money back. Originally, it was May 15th. So you've got more time to do it.

Sandy Block: And they even extended this... a couple of other things they did... they said there's a rule that states you can only do one rollover every 12 months. That's gone. Even if you did a rollover in the last year, you can still do this. And if you have an inherited IRA, people who took those IRAs in the past also had to take required minimum distributions. They get a break, too. Everybody gets a break. This is like Oprah -- everybody gets a break on their RMDs. So we will definitely be writing about this in the magazine. Our friend Rocky Mengle has a great story about this on the website with more details.

Sandy Block: But to all of the readers who were annoyed because they were not included in this waiver, they are now included. So celebrate people. This is good news.

Ryan Ermey: Yeah. And just a quick reminder for folks who may be some of our less seasoned listeners: Generally, once you turn 72 before 2020... it was once you turned 70 and a half, you have to take a certain amount of money out of a traditional IRA or 401(k) plan every year. And these are mandatory withdrawals. Those are what we're talking about when we refer to RMDs or required minimum distributions. And the issue with a lot of people taking them out this year, people generally don't like to take them out if they don't have to anyway. I mean, that's why they're required.

Ryan Ermey: People don't like it in general, but they especially, don't like having to take money out when their accounts have been clobbered. This may have been the case earlier in the year and even still, the market hasn't bounced all the way back. So this has been a really big deal for anyone who well, acted on it early. Who thought they were being proactive, but then, oh my God, the market really had a lot of turmoil. So this is a big deal for a lot of people. And we're always happy to be the bearers of good news.

Sandy Block: There you go.

Ryan Ermey: So there you have it folks. Go and check out Rocky Mengle's story on Kiplinger.com. We will have it up in the show notes. And yeah, good financial news isn't always easy to come by these days. So we're glad to be the ones that bring it to you. If you're thinking of switching banks or opening a new account, stay tuned for our picks for best banks with Lisa Gerstner........

© Kiplinger


Get it on Google Play